For Carlos Villalobos, the press conference last March in Miami offered hope that things would finally change for residents of troubled community associations.
Standing in front of news cameras, he described life in the Hammocks, a sprawling community west of Miami where prosecutors say board members embezzled millions of dollars, maintaining power through lawsuits and questionable election practices. With prosecutors and elected officials by his side, he endorsed legislation to crack down on community associations that steal, cheat or threaten residents.
“For me, it’s an honor to be here and, especially, to offer a thank you — infinite thanks,” he said. “In the Hammocks, we’ve faced a nightmarish experience. And it’s a nightmare that also has cost us lots of money. But we’re getting past it little by little.”
But a few weeks after the news conference, after the Florida House and Senate finished revising the community association legislation, Villalobos and other Hammocks homeowners were furious — and lobbyists for HOAs and condo managers were expressing satisfaction with the outcome.
The bill that would finally win approval had been cut from 60 pages to 16. Protections for condo owners had been stripped out, leaving the bill addressed exclusively to homeowners associations, which typically include only single-family homes.
A robust enforcement mechanism, which called for suspected criminal activity to be referred to the Florida Department of Law Enforcement, had been deleted. Limits on boards’ power to go to court to seize homes for non-payment of fines were removed.
The fate of the legislation illustrated the influence of Florida’s condominium and HOA industry, which includes law firms, management companies, contractors, landscaping companies and other service providers. They prune trees, draft legal documents, file liens, collect monthly fees, repair roofs, assist with board meetings and perform thousands of other tasks for the self-governing communities that are home to about half of Florida’s population.
The business accounts for $18 billion a year in spending in Florida, according to the Community Associations Institute, a national trade association. Law firms, property management companies and others in the community association business have contributed more than $6.5 million to Florida candidates over the past 10 years, according to state campaign finance records, although that figure also includes companies engaged in apartment management. And the industry employs savvy lobbyists who know how to operate in Tallahassee.
No one disputes that Florida’s community management industry has a difficult job. Overworked managers have to deal with faction-ridden boards, demanding homeowners, soaring insurance costs, neighbor-against-neighbor disputes, maintenance headaches and, of course, the occasional hurricane.
But the industry’s influence over the state Legislature can come at the expense of the rights of homeowners.
Since the 1970s, lobbying organizations representing the association industry have had a strong influence in the Legislature, often on non-controversial issues intended to improve the effectiveness of association governance.
Related Articles
•Local News | Condo Wars: Boards can use defamation laws to stifle dissent | Investigation
•Local News | Boca condo board loses federal records suit, sanctioned for ‘frivolous’ claims
But some of their initiatives were designed to allow boards to retain maximum power at the expense of homeowners, making it easier for law firms and management companies to preserve lucrative relationships with condo and HOA boards.
Industry lobbyists fought proposals for more state oversight of HOAs and condos, leaving homeowners at the mercy of their boards. They fought to preserve boards’ abilities to levy fines on homeowners and turn fines into liens. While many consider such penalties an essential tool for maintaining property values and neighborhood peace, they give more power to boards and generate fees for law firms. They opposed proposals to make it easier to remove board members for misconduct or to require new board members to undergo a few hours of training.
Villalobos called the final version of the anti-corruption legislation, which was signed by Gov. Ron DeSantis, a “huge disappointment.”
“I saw the original text, and it was really good — really, really good,” he said. “What was left is something like 10 percent of what we were promised would be done. So any corrupt board has a free hand to do whatever they want still. ”
“We’re talking about powerful management companies and lawyers and all sorts of interests,” he said. “We’re at the end of the food chain, the residents.”
State Rep. Juan Carlos Porras, a Republican who represents the Hammocks area and sponsored the original anti-corruption legislation, blamed the changes on legislative leaders’ concerns about the cost of an investigative apparatus and the community association industry’s pressure on the Senate to weaken protections for homeowners.
“The special interests and the HOA lobby dug their heels into the Senate,” he said. “They realized quickly that with me, at least, and with House leadership, that wasn’t going to work. I told them I was steadfast on what I wanted in the bill and the changes I would not be able to compromise with, but sadly they were able to get a little more compromise in the Senate.”
A community held captive
At the Hammocks, a suburban community of more than 6,500 single-family homes, townhouses and condos near the Everglades, prosecutors say a clique of board members ran the main homeowners association as a racketeering enterprise.
The scheme involved the use of five companies to embezzle monthly homeowner dues, with the board writing checks to the companies for little or no work, according to a Nov. 9, 2022, arrest warrant from the Miami-Dade State Attorney’s Office. Investigators documented nearly $2.4 million in losses. Two of the companies, Excellent Work & Services LLC and Cima Solutions Inc., were owned by Jose Antonio Gonzalez, husband of former board president Marglli Gallego.
Gallego was charged with racketeering, organized fraud, money laundering, grand theft and fabricating physical evidence. Gonzalez was charged with racketeering, money laundering and grand theft. Former board president Monica Isabel Ghilardi and former board member Myriam Arango Rodgers were charged with racketeering and grand theft. Former board member, secretary and treasurer Yoleidis Lopez Garcia was charged with grand theft.
All have pleaded not guilty. No other current or former board members in the Hammocks have been charged.
Jude Faccidomo, attorney for Gonzalez, wrote in an email to the Sun Sentinel, “While the outrage of the homeowners is certainly understandable, we believe it is misplaced as related to Mr. Gonzalez. We look forward to thoroughly vetting any evidence provided by the state, especially as it pertains to our client.”
The board used the association’s money to resist investigations, filing suit against the Miami-Dade State Attorney’s Office, suing two detectives for defamation and going to court to fight subpoenas, according to the arrest warrant. After Gallego was arrested April 15, 2021, on theft and fraud charges, Cima Solutions paid her bail using association funds disguised as company revenue, the arrest warrant stated. The HOA paid her lawyers.
“To date, the HOA has paid over $250,000 of homeowner money to defend Ms. Gallego in a case in which she is charged with misappropriating funds from the very homeowners now paying for her defense,” according to the arrest warrant.
The amount lost to the board members’ scheme exceeded $3.4 million, not counting millions in improper legal fees, according to a report from a court-appointed receiver.
For years, the community’s residents had suspected the leadership was corrupt. They asked questions, demanded documents and reported their suspicions to the police. Then, in early 2022, the board raised dues by up to 400%, provoking protests from homeowners.
The board survived a shady election, in which “the HOA closed the polling location early thus preventing some owners from voting by publicly announcing some sort of threat,” according to the arrest warrant.
“The HOA Board, through its attorney, later declined to cooperate with law enforcement to investigate the nature of the claimed threat or to aid in identifying the alleged culprits,” the arrest warrant stated.
Dissidents filed an election complaint with the Florida Department of Business and Professional Regulation, which found the election was flawed and ordered a new one. The board challenged the order in court.
“DBPR deemed there were irregularities in the election, and a new election was ordered,” said Chicky Ardisson, a Hammocks reformer elected to the board this year. “And the board did nothing. The board and their attorneys decided that the DBPR holds no power over them so they just basically ignored it.”
Florida Legislature to the rescue?
After former Hammocks board president Gallego appeared in court in an orange jail jumpsuit, many advocates thought the time had finally arrived for serious reform of Florida’s condo and HOA laws.
Anti-corruption bills proposed last February in the Florida Legislature attempted to strengthen the Florida Department of Business and Professional Regulation’s ability to root out wrongdoing at HOAs and condominiums, giving the agency more authority to intervene and requiring it to forward suspected criminal cases to the Florida Department of Law Enforcement.
The legislation would have addressed other issues that came up in the Hammocks case, such as the use of the community’s funds to defend board members in criminal cases. And it would have limited a key source of power for boards: The ability to turn fines for violations into liens and use those liens to foreclose on residents’ homes.
But Porras, sponsor of the House bill, said the cost of creating an enforcement mechanism generated opposition in the Legislature. The financial concerns arose after the Florida Department of Business and Professional Regulation produced a report claiming that it would require 28 additional full-time staff to implement the plan, at an annual cost of nearly$2.2 million.
The revised version of the legislation removed condos completely and took away mechanisms for enforcing criminal violations, which has the effect of leaving homeowners the options of sleuthing out wrongdoing on their own or attempting to involve the local police, who are typically ill-equipped for such investigations.
Dissenters also run the risk of a libel or slander lawsuit. The Sun Sentinel investigation of condos and HOAs found that board members have used Florida’s defamation laws to attack critics, putting them at risk of serious financial damages.
The bills also generated concern from two lobbying organizations for the industry in Florida, Chief Executive Officers of Management Companies and the Community Associations Institute.
Josh Burkett, who works for Mark Anderson, lobbyist for Chief Executive Officers of Management Companies, requested and obtained meetings with Sen. Ana Maria Rodriguez, R-Doral, the Senate sponsor of the legislation, and with Sen. Joe Gruters, chairman of the Senate Regulated Industries Committee and former state Republican Party chairman, according to emails obtained by the Sun Sentinel through a public records request to the Florida Senate.
Gruter’s committee was the bill’s first stop in the Senate, and that’s where legislators took steps to remove parts of the bills that would have limited the powers of HOA boards. They deleted limits on boards’ power to fine homeowners. They removed criminal penalties for various forms of board misconduct, reducing sanctions on board members who accept kickbacks from a possible felony to a civil fine.
The Senate’s initial revision still contained new limits on the ability of boards to place liens on residents’ homes for non-payment of fines and to go to court to seize their property for nonpayment. This had been a key change sought by reformers who said that the liening power placed homeowners too much at the mercy of their boards.
But Burkett wrote an email to Committee Chairman Gruters, urging him to restore the full power to use liens, saying it was a critical tool for making sure everyone followed the rules.
“The ability to lien for a fine is an important enforcement tool of an HOA,” he wrote in an email to Gruters. “The current language in SB 1114 unfairly pushes the burden of enforcement costs onto the good actor homeowners instead of the violating homeowner.”
The bill’s revision restored the ability to place liens on homes and to go to court to foreclose on them.. Sen. Rodriguez presented the stripped-down bill on April 4 to the committee, where it won unanimous approval.
Rodriguez did not respond to repeated requests for comment.
The day after the stripped-down bill won approval from the Regulated Industries Committee, Mark Anderson, lobbyist for Chief Executive Officers of Management Companies, emailed an extravagant thank-you note to the committee’s staff director and its chief attorney, saying, “Just wanted to take a minute to personally thank you both for your work on the Substitute Amendment to 1114 over the last 48 hours. It wasn’t and isn’t lost on me how much you guys do and that was especially true on SB 1114.”
After the legislative session, the Community Associations Institute took some of the credit for the changes, writing in an end-of-session report: “The original bill was 60 pages long and would have impacted Condos, Co-Ops and HOAs. However, after the Community Association Institute voiced concerns, Representative Porras and Senator Rodriguez worked to reduce prohibitions that were seen as unnecessary by most community association constituents.”
Despite the deletions and despite applying only to HOAs, the law signed by the governor contains several reforms. It authorizes the removal of board members charged with various crimes. It bans bribery and fraudulent election practices. It requires stricter financial practices, the disclosure of conflicts of interest by board members and greater transparency, with the board required to provide advance notice of agenda items for board meetings.
But the activists who helped oust the Hammocks board members say the law was still weak and represents a betrayal by the state Legislature to protect the community association establishment.
“The HOA industry and the representatives really don’t care about us,” said Marcoantonio Real, an opponent of the old Hammocks leadership who now serves on the community’s advisory board. “They just care about the industry continuing financing their reelection campaigns.”
Ana Danton, a Hammocks resident who had joined prosecutors and elected officials at the March news conference endorsing the original legislation, said the resulting law left intact a board’s ability to unfairly target homeowners with fines and liens.
“They settled for something that completely protects all the support systems that these boards have,” she said. “We’re defending our homes, we’re defending our families, the right of kids of inheriting our properties. They think that we’re dumb and they think we don’t count and they think if they throw some candy at us, we’re like monkeys. There’s no respect.”
Rep. Porras, sponsor of the House version of the legislation, blamed the changes on the community association management industry and the Senate leadership.
“A field like this is very convoluted with special interests, so I was well aware of what I was getting myself into,” he said. “I think the main changes were made when it went over to the Senate. I think [Sen. Rodriguez] ran into a lot of pushback from Senate leadership, from what I was told. I’m sure Mark Anderson and his guys had something to do with that too. But from what I was told, Senate leadership wanted to have it dialed down.”
Fights over community association reforms
The battle over this year’s reform bills was just the latest in a long series of legislative fights pitting homeowners against management companies, lawyers and others who make their livings in the association industry.
Interest groups have been forming since the 1970s to fight homeowners’ calls for reforms, such as greater government oversight of condo associations and HOAs, the criminalization of misconduct by board members and restrictions on boards’ abilities to levy fines, charge for attorneys fees and put liens on members’ homes.
Eric Glazer, a Fort Lauderdale lawyer who teaches condo and HOA board certification classes and hosts the Condo Craze and HOAs radio show on WFTL 850 AM, points to a one key reform that has been repeatedly thwarted in the state Legislature: mandatory training for board members.
Under current law, new board members can either take a course or sign a document saying they’ve read their community’s governing documents and will uphold the law.
“You have people that may not be qualified to run seven- or eight-figure budgets, that have never done this before,” he said. “Or people become president of the board, and they think that because they’re president, they get to make all the decisions.”
Such uninformed boards can be more easily manipulated by those trying to do business with them, he said.
“You have to know, quite frankly, when you’re getting ripped off,” he said. “And if you don’t, you’re putting your association in harm’s way.”
Protecting the rules that protect neighborhoods
For all the complaints about petty rules, monotonous architecture and overbearing boards, many homeowners value the convenience, stability and tranquility that comes with such communities.
They provide amenities such as pools, clubhouses and fitness centers, require neighbors to maintain their properties and prohibit activities that would disrupt the neighborhood’s peace and quiet.
Houses in HOAs maintain their property values more reliably than similar houses outside of them. A 2019 study in the Journal of Urban Economics found the “HOA premium” to be worth at least 4% of a property’s value.
In their attempts to limit this year’s anti-corruption bills, lobbyists for the HOA and condo industry say they were just trying to prevent legislation that would have made it more difficult to preserve a way of life that had attracted many residents in the first place. They say the original bills would have made it harder for board members to do their jobs and for communities to enforce standards that protected residents’ property values and peace of mind.
“I’m representing the management companies who work for the board,” said Anderson, the lobbyist for Chief Executive Officers of Management Companies. “So the boards of these communities employ the management companies that I represent. And we were just relaying to the Legislature what a lot of these boards were saying on the practical effect of what this bill would have done.”
“You’ve got bad board members, people that are doing things they shouldn’t be doing,” he said. “You’ve also got homeowners who violate the rules and who — because of what they’re doing — are causing in some cases the assessments and the fees to go up to hire lawyers to go to court to enforce the law.”
The original legislation would have criminalized inadvertent, routine errors by board members, who are, after all, non-experts who have taken on the responsibility of helping govern their communities for their fellow homeowners, said Travis Moore, lobbyist for the Community Associations Institute – Florida Legislative Alliance and for First Service Residential of Florida Inc.
“The thought was we can’t have secretary of the association, Edith, who’s 78 years old, and she doesn’t provide somebody’s request for something in 10 days and now she’s charged with a felony,” he said.
Debbie Reinhardt, chief executive officer of Resource Property Management, which manages more than 350 communities in Florida, said the original legislation might have made it harder to attract people willing to serve as board members.
“It’s a thankless job for many board members,” said Reinhardt, who also serves as president of Chief Executive Officers of Management Companies, the industry trade group. “They take a lot of heat. They put a lot of time and effort into it. We couldn’t do our job if we didn’t have board members. It’s hard, and they’re not appreciated.”
The alleged criminality that occurred in the Hammocks shouldn’t lead to rules that deter others from serving in volunteer positions to govern their communities, she said.
“The Hammocks was a unique, special situation where we were all horrified as to what those poor people had to deal with,” she said. “That is not what the mainstream HOA people do.”
Lobbyists for the industry say the original bill would have taken away the power of associations to curb chronic rule-breaking by turning fines into liens on homeowners’ properties, making it more difficult to enforce the very rules that make such communities attractive to many homeowners.
This is particularly important, Anderson said, for large corporate landlords that acquire and rent out houses in homeowner’s associations.
“The original bill prohibited the right of an association’s unpaid fine to become a lien if an owner (in this case, the corporate rental home industry) refuses to cure the violation,” Anderson wrote in an email to the Sun Sentinel. “Without that ‘liening’ authority, there would have been NO incentive for the owner to abide by the HOA rules. Thankfully, the legislature removed that provision and, in doing so, protected the rights and property values of the other homeowners in an HOA who observe and comply with the rules.”
Miami-Dade County State Attorney Katherine Fernandez Rundle, whose office is prosecuting the Hammocks case, had pushed hard for the anti-corruption bills, lobbying legislators and speaking publicly about the need for serious reform of the state’s community association laws.
“We were very optimistic,” she said. “The one hope I had was that change was going to come. We were very hopeful. We spent quite a lot of time on the phone with legislators.”
The final legislative product, she said, was weak, lacking teeth to enforce criminal violations and missing a series of measures she had hoped would rein in rogue boards.
“It was extremely disappointing,” she said. “We did everything we could during the legislative process, and this was a priority. It just kept getting watered down.”
But Fernandez Rundle said she’ll try again next year. “I’m not quitting on this,” she said.
(Reporters Ron Hurtibise, Danica Jefferies and Brittany Wallman contributed to this report.)